Census Data Confirms the Impact of CTC

Published: https://cssp.org/2022/09/new-census-data-confirms-the-powerful-impact-of-the-child-tax-credit/

By: Ellie Kaverman

Date: September 14, 2022 

On September 13, the Census Bureau released its 2021 data on income, poverty, and health insurance. This year’s data demonstrate how powerful enhanced government supports like the Child Tax Credit (CTC) can be in buttressing families, promoting economic well-being, and advancing racial equity. In 2021, the share of people living in poverty fell from 9.2 percent to 7.8 percent, as measured by the Supplemental Poverty Measure (SPM), the lowest rate on record.

Driven in large part by the CTC, which was significantly expanded in 2021 under the American Rescue Plan Act (ARPA), child poverty was cut nearly in half from 9.7 percent to 5.2 percent, with Black, Hispanic, and White children all seeing historic declines in poverty.

Today’s release joins a chorus of other national data from 2021, including CSSP’s own research findings, confirming the power of providing unconditional cash directly to the families who need it most. According to the Census Bureau, the expanded CTC alone lifted 5.3 million people above the poverty line last year, including 2.9 million children. Importantly, given the long history of the CTC and other government supports excluding and underserving Black and Latinx families, the 2021 CTC was felt across racial and ethnic groups and served as a tool to advance racial equity.

Approximately 1.2 million Hispanic children, 820,000 White children, 716,000 Black children, and 110,000 Asian children were lifted above the poverty line by the CTC.

Children living in families with the lowest incomes also saw the most support from the CTC, with the data showing that the CTC cut deep poverty – or children with incomes below 50 percent of the poverty threshold – nearly in half, as measured by the SPM.

Today’s data align with what CSSP learned in its research with parents and caregivers of color across the country over the last year. From September 2021 through March 2022, CSSP interviewed 45 parents and caregivers of color from Michigan, Mississippi, North Carolina, and Arizona to learn about how the Child Tax Credit was working for them, what they would change about the program, and how they would design a permanent child allowance program to support families.

We spoke primarily to Black and Latinx parents because prior to the temporary ARPA expansion of the CTC, they had been disproportionately excluded from the program due to income thresholds that punish those with the lowest incomes and because of how racism has shaped policies, leading to caregivers of color being historically underserved by cash benefits.

The families CSSP spoke to, like the families captured in numerous national surveys over the last year, used their CTC checks to pay bills and invest in their children—buying groceries, signing their children up for extracurricular activities, paying for utilities, and so much more.

For Charisse, a mom in Mississippi, the CTC meant being able to “stay on top of our bills” for her family of seven. “That extra money is coming in to take up the slack of whatever we need for the kids, groceries and all that extra money [has] been there for that,” she said.

Taken together, today’s data release and our in-depth interviews with families reflect the profound way that the CTC helped strengthen families and communities during its six-month expansion in 2021. As Michael, a father in Michigan told us, the CTC made families in his community “feel like, ‘Okay, now we’re getting a part of what it means to be an American.’”

Today’s data indicate that permanently expanding the CTC is not just the logical course of action to reduce economic insecurity and promote family well-being, but it is also the moral course of action. Our society has chronically undervalued the work of parents and caregivers in raising the next generation, and has largely left caregivers on their own by providing them with only limited assistance. But it is not too late to begin supporting families, starting with strengthening their economic security.

Rachelle, a mother of a five-year-old in North Carolina who works in early education, explained to CSSP that “[Making the CTC permanent] would just impact our quality of life as a whole… Money is not the answer to everything, but it definitely helps us to figure out ways to make solutions easier to access.”

Today’s data release from the Census Bureau should be a wake-up call to policymakers: enhanced government support, like the expanded CTC, effectively promotes the economic well-being of families and when sustained over time, has the potential to advance racial and economic justice. Now is the time to permanently expand the CTC.